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Best Practices for a Successful Loyalty Consulting Engagement

Engaging with a loyalty consultant can provide a specific expertise, objective viewpoint or fresh thinking that benefits even for the most sophisticated loyalty firms and program operators. However, it can also be a challenge for program executives to manage the process and most importantly, get an actionable result from a loyalty consulting group. Well managed consulting engagements are based on loyalty insights and will deliver a viable program design that is well substantiated and will differentiate the brand.

Here is a list of Best Practices to ensure a successful engagement, gleaned through years of both managing loyalty consultants as an operator, and serving as a consultant for loyalty firms.

#1: Specify Your Objectives:

It’s surprising how often loyalty consulting engagement objectives are murky or ill defined. Frequently we’ll see things like “improve the loyalty program” or “grow revenue”, whereas more strategic company loyalty objectives will result in a more inspired and impactful design.

Best practice examples such as “increase engagement by 10%”, “add 1 transaction per customer”, and “grow active membership to 10MM” will set the direction and magnitude of the change needed. It will also drive energy and consensus within the organization. Don’t be afraid to be aspirational and set a stretch goal in addition to baseline, it will lead to more ambitious approaches and creative thinking.

#2 Set a Specific Budget Range for Bidders

The traditional RFP approach is to leave the budget completely open-ended, with the thinking that it will encourage bidders to come in with the lowest possible price. However, I’d seen better results by flipping the script -- name the budget and  challenge bidders to offer the most possible value for the budget level.

Although procurement may initially be averse to this approach, you’ll find much more aggressive proposals including real value with lower hourly rates and no-charge add-ons at a fixed price. In contrast, loyalty consulting RFP’s with an unbound budget will result in a wide range of scopes and budgets that will not enable valid comparisons. An alternative approach is do two rounds within the RFP, an initial round with no price parameters, and then a refined pricing exercise for the finalists which will provide a valid basis for comparison.

#3 Hire the Right Kind of Loyalty Firm

There are a number of different types of providers to consider for sourcing customer loyalty consultants. For example, many loyalty platform providers offer consulting services, and this may be a good choice that offers strong value if you are already aligned with a particular platform solution. Loyalty program agencies also offer consulting services and supporting implementation and ongoing services -- this can be a good route if you will ultimately be outsourcing program execution to a 3’rd party.

Finally, pure play loyalty consulting group such as LoyaltyLevers offer comprehensive design services and an objective viewpoint that can lead to a more impactful and sophisticated design. Including a range of different kinds of providers will lead to a richer range of options to select from.

Foster Teaming & Consensus Building

The loyalty program impacts every aspect of the organization. In order to build consensus, important design and optimization decisions will need to enjoy input from a well-represented set of stakeholders. We’ve seen great results from building from a cross-section of disciplines including marketing, finance, operations, and product/merchandising for starters. Involving this team from the beginning will ensure buy-in.

Another key to productive teaming is open information sharing. In many organizations, the details of loyalty program operation and performance are closely held within the loyalty team. Consultants may only be told a small portion of the picture, and this can only hamper results. Program innovation springs from loyalty insights, and quality loyalty insights require gaining access to granular transaction, engagement, and redemption data, as well as in-depth market research. Let this data speak, and you’ll have a solid foundation for your recommendations.

Identify an Executive Sponsor

Because loyalty programs have become such an important driver of revenue and profit, it is critical to have an executive sponsor to gain final approval of the recommendations – without this key element your great ideas may end up on the shelf.

The role of executive sponsor works differently at every organization, but they should be involved at key milestones along the way. Particularly important is the engagement kick-off, to ensure the team is operating with the proper charter. Another key milestone will be the business case; the sponsor need to embrace the assumptions and be able to support those to the C-Level. Overall, your executive sponsor should have a passion for the loyalty program, and the judgement and credibility to ensure that your program design truly meets the organization’s needs, and gets the execution budget and support that it deserves.

LoyaltyLevers Take

Following these best practices from the beginning will set the stage for a successful engagement. While it takes some work up front to select the right loyalty consulting group, set clear objectives, establish a well-balanced and supported team and provide open access to necessary data will enable the team to move quickly to an impactful and innovative loyalty program design.

As you move into execution, selecting the right consulting approach and supporting analysis and research methodologies is hugely important as well – more information on the roadmap for loyalty program design here.  For a sample of deliverables to consider for a loyalty consulting engagement, please see details of our Discovery Package, which provides a quick yet high impact way to get started.